SB 267: "An Act relating to the duties of the Department of Labor and Workforce Development; relating to the tax rate applicable to the production of oil and gas; relating to a rebate of the production tax on oil and gas based on the employment of resident workers; relating to credits against the oil and gas production tax; relating to the period in which oil and gas production taxes may be assessed; relating to the interest rates applicable on certain amounts due related to various taxes, penalties, payments, and the Alaska Gasline Inducement Act; and providing for an effective date."
00 SENATE BILL NO. 267 01 "An Act relating to the duties of the Department of Labor and Workforce Development; 02 relating to the tax rate applicable to the production of oil and gas; relating to a rebate of 03 the production tax on oil and gas based on the employment of resident workers; relating 04 to credits against the oil and gas production tax; relating to the period in which oil and 05 gas production taxes may be assessed; relating to the interest rates applicable on certain 06 amounts due related to various taxes, penalties, payments, and the Alaska Gasline 07 Inducement Act; and providing for an effective date." 08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 09 * Section 1. AS 05.15.095(c) is amended to read: 10 (c) A delinquent fee bears interest at the rate set by AS 43.05.225(a)(2) 11 [AS 43.05.225]. 12 * Sec. 2. AS 23.05.080 is amended by adding a new subsection to read: 13 (b) In addition to the records that must be kept under (a) of this section, an
01 employer subject to tax under AS 43.55.011(e) and claiming a rebate under 02 AS 43.55.022 shall keep for each person who provides labor the cost of which is 03 included in an allowable lease expenditure under AS 43.55.165 an accurate record of 04 the name, address, and occupation of the person, of the daily and weekly hours worked 05 by the person, of whether the person is a resident worker, of the total numbers of hours 06 during a calendar year worked by resident workers, of the total number of hours 07 during a calendar year worked by persons that are not resident workers, and of the 08 wages paid each pay period to each person. A record required under this subsection 09 shall be kept on file for at least three years and may be provided to the Department of 10 Revenue by request. In this subsection, "resident worker" has the meaning given in 11 AS 43.40.092. 12 * Sec. 3. AS 23.05.100 is amended to read: 13 Sec. 23.05.100. Inspections and examination of records. The department 14 may 15 (1) enter a place of employment during regular hours of employment 16 and, in cooperation with the employer, or someone designated by the employer, collect 17 (A) facts and statistics relating to the employment of workers; 18 and 19 (B) information required to be kept under AS 23.05.080(b) 20 for the purpose of verifying the eligibility of the employer for a rebate 21 under AS 43.55.022; 22 (2) make inspections for the proper enforcement of all state labor laws; 23 (3) for the purpose of examination, have access to and copy from any 24 book, account, record, payroll, paper, or document relating to the employment of 25 workers. 26 * Sec. 4. AS 23.05 is amended by adding a new section to article 1 to read: 27 Sec. 23.05.135. Definition. In AS 23.05.010 - 23.05.135, "resident worker" 28 has the meaning given in AS 43.40.092. 29 * Sec. 5. AS 34.45.470(a) is amended to read: 30 (a) A person who fails to pay or deliver property within the time prescribed by 31 this chapter may be required to pay to the department interest at the annual rate
01 calculated under AS 43.05.225(a)(2) [AS 43.05.225] on the property or the value of it 02 from the date the property should have been paid or delivered. 03 * Sec. 6. AS 43.05.225 is amended to read: 04 Sec. 43.05.225. Interest. Unless otherwise provided, 05 (1) when a tax levied in this title becomes delinquent, it bears interest 06 in a calendar quarter at the rate of two [FIVE] percentage points above the annual rate 07 charged member banks for advances by the 12th Federal Reserve District as of the 08 first day of that calendar quarter, or at the annual rate of 11 percent, whichever is 09 lower [GREATER], compounded quarterly as of the last day of that quarter; 10 (2) the interest rate is 12 percent a year for 11 (A) delinquent fees payable under AS 05.15.095(c); and 12 (B) [REPEALED 13 (C)] unclaimed property that is not timely paid or delivered, as 14 allowed by AS 34.45.470(a). 15 * Sec. 7. AS 43.05.225 is amended by adding a new subsection to read: 16 (b) The unpaid amount of an increase in tax liability that is the direct result of 17 the adoption of a regulation with retroactive application is not considered delinquent 18 for the purposes of (a) of this section until 30 days after the effective date of the 19 regulation with retroactive application. 20 * Sec. 8. AS 43.05.280(a) is amended to read: 21 (a) Interest shall be allowed and paid on an overpayment of a tax under this 22 title at the rate and in the manner provided in AS 43.05.225(a)(1) [AS 43.05.225(1)]. 23 * Sec. 9. AS 43.31.141 is amended to read: 24 Sec. 43.31.141. When tax due; [,] extension and interest. The tax imposed 25 by this chapter is due and payable 15 months after the decedent's death and shall be 26 paid by the executor to the department. If the department finds that the payment on the 27 due date of tax or any part of the tax would impose undue hardship upon the estate, the 28 department may extend the time for payment of any part, but no extension may be for 29 more than one year and the aggregate of extensions with respect to an estate may not 30 exceed five years from the due date. In that case, the amount in respect of which the 31 extension is granted shall be paid on or before the date of the expiration of the period
01 of the extension unless a further extension is granted. If the time for the payment is 02 extended, there shall be collected, as part of this amount, interest on the tax as 03 provided in AS 43.05.225(a)(1) [AS 43.05.225(1)] from the due date of the tax to the 04 date the tax is paid. 05 * Sec. 10. AS 43.50.570 is amended to read: 06 Sec. 43.50.570. Interest. A licensee who fails to pay an amount due for the 07 purchase of stamps within the time required 08 (1) is considered to have failed to pay the cigarette taxes due under this 09 chapter; and 10 (2) shall pay interest at the rate established under AS 43.05.225(a)(1) 11 [AS 43.05.225] from the date on which the amount became due until the date of 12 payment. 13 * Sec. 11. AS 43.55.011(g) is amended to read: 14 (g) For each month of the calendar year for which the producer's average 15 monthly production tax value under AS 43.55.160(a)(2) per BTU equivalent barrel of 16 the taxable oil and gas is more than $30, the amount of tax for purposes of (e)(2) of 17 this section is determined by multiplying the monthly production tax value of the 18 taxable oil and gas produced during the month by the tax rate calculated as follows: 19 (1) if the producer's average monthly production tax value per BTU 20 equivalent barrel of the taxable oil and gas for the month is not more than $155 21 [$92.50], the tax rate is 0.2 [0.4] percent multiplied by the number that represents the 22 difference between that average monthly production tax value per BTU equivalent 23 barrel and $30; or 24 (2) if the producer's average monthly production tax value per BTU 25 equivalent barrel of the taxable oil and gas for the month is more than $155 [$92.50], 26 the tax rate is the sum of 25 percent and the product of 0.1 percent multiplied by the 27 number that represents the difference between the average monthly production tax 28 value per BTU equivalent barrel and $155 [$92.50], except that the sum determined 29 under this paragraph may not exceed 50 percent. 30 * Sec. 12. AS 43.55.020(g) is amended to read: 31 (g) Notwithstanding any contrary provision of AS 43.05.225(a) and except as
01 provided in (i) of this section [AS 43.05.225], an unpaid amount of an installment 02 payment required under (a)(1) - (3) of this section that is not paid when due bears 03 interest (1) at the rate provided for an underpayment under 26 U.S.C. 6621 (Internal 04 Revenue Code), as amended, compounded daily, from the date the installment 05 payment is due until March 31 following the calendar year of production, and (2) as 06 provided for a delinquent tax under AS 43.05.225(a)(1) [AS 43.05.225] after that 07 March 31. Interest accrued under (1) of this subsection that remains unpaid after that 08 March 31 is treated as an addition to tax that bears interest under (2) of this subsection. 09 An unpaid amount of tax due under (a)(4) of this section that is not paid when due 10 bears interest as provided for a delinquent tax under AS 43.05.225(a)(1) 11 [AS 43.05.225]. 12 * Sec. 13. AS 43.55.020(h) is amended to read: 13 (h) Notwithstanding any contrary provision of AS 43.05.280, 14 (1) an overpayment of an installment payment required under (a)(1) - 15 (3) of this section bears interest at the rate provided for an overpayment under 26 16 U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from the later 17 of the date the installment payment is due or the date the overpayment is made, until 18 the earlier of 19 (A) the date it is refunded or is applied to an underpayment; or 20 (B) March 31 following the calendar year of production; 21 (2) except as provided under (1) of this subsection, interest with 22 respect to an overpayment is allowed only on any net overpayment of the payments 23 required under (a) of this section that remains after the later of March 31 following the 24 calendar year of production or the date that the statement required under 25 AS 43.55.030(a) is filed; 26 (3) interest is allowed under (2) of this subsection only from a date that 27 is 90 days after the later of March 31 following the calendar year of production or the 28 date that the statement required under AS 43.55.030(a) is filed; interest is not allowed 29 if the overpayment was refunded within the 90-day period; 30 (4) interest under (2) and (3) of this subsection is paid at the rate and in 31 the manner provided in AS 43.05.225(a)(1) [AS 43.05.225(1)].
01 * Sec. 14. AS 43.55.020 is amended by adding a new subsection to read: 02 (i) The unpaid amount of an installment payment required under (g) of this 03 section that is the direct result of the adoption of a regulation with retroactive 04 application does not bear interest until 30 days after the effective date of the regulation 05 with retroactive application. 06 * Sec. 15. AS 43.55 is amended by adding a new section to read: 07 Sec. 43.55.022. Tax rebate for employing resident workers. (a) Subject to 08 appropriation and the requirements of this section, a taxpayer subject to tax under 09 AS 43.55.011(e)(1) that incurs labor costs that are allowable lease expenditures under 10 AS 43.55.165 is entitled to a rebate if 80 percent or more of the labor is done by 11 resident workers. 12 (b) The amount of the rebate is equal to a percentage of the tax paid under 13 AS 43.55.011(e)(1) based on the percentage of labor done by resident workers the cost 14 of which is included in an allowable lease expenditure under AS 43.55.165. The 15 amount of the rebate is equal to the following percentage of the tax paid under 16 AS 43.55.011(e)(1): 17 (1) two percent if the percentage of labor done by resident workers is 18 at least 80 percent but less than 82.5 percent; 19 (2) four percent if the percentage of labor done by resident workers is 20 at least 82.5 percent but less than 85 percent; 21 (3) six percent if the percentage of labor done by resident workers is at 22 least 85 percent but less than 87.5 percent; 23 (4) eight percent if the percentage of labor done by resident workers is 24 at least 87.5 percent but less than 90 percent; 25 (5) 10 percent if the percentage of labor done by resident workers is at 26 least 90 percent but less than 92.5 percent; 27 (6) 12 percent if the percentage of labor done by resident workers is at 28 least 92.5 percent but less than 95 percent; 29 (7) 14 percent if the percentage of labor done by resident workers is at 30 least 95 percent but less than 97.5 percent; 31 (8) 16 percent if the percentage of labor done by resident workers is at
01 least 97.5 percent but less than 100 percent; and 02 (9) 20 percent if the percentage of labor done by resident workers is 03 100 percent. 04 (c) The percentage of labor done by resident workers is 05 (1) determined on a calendar year basis using the number of hours of 06 labor the cost of which is a lease expenditure, and includes all hours of labor, 07 regardless of whether a worker is paid on an hourly or some other basis; and 08 (2) a fraction the numerator of which is the number of hours of labor 09 done by resident workers the cost of which is a lease expenditure, and the denominator 10 of which is the number of hours of labor by all workers the cost of which is a lease 11 expenditure, expressed as a percentage. 12 (d) To qualify for the rebate under this section, a person subject to tax under 13 AS 43.55.011(e) shall file an application for the rebate at the time a statement must be 14 filed under AS 43.55.030(a) for the calendar year for which the rebate is claimed. The 15 application must include the following for the calendar year for which the rebate is 16 claimed: 17 (1) the number of hours of labor, the cost of which is a lease 18 expenditure; 19 (2) the number of hours of labor done by resident workers that are 20 included in (1) of this subsection; 21 (3) the total cost of labor that is a lease expenditure; and 22 (4) other information required by the department in a regulation 23 adopted to administer this section, including the names of the resident workers whose 24 hours of labor are included in (1) of this subsection. 25 (e) At the same time an application is made to the department under (d) of this 26 section, the person applying for a rebate shall file a report with the commissioner of 27 labor and workforce development. The report must include the information in (d)(1) 28 and (2) of this section and other information required by the commissioner of labor 29 and workforce development by regulation. Any amendment to the application in (d) of 30 this section that changes the information in (d)(1) and (2) of this section must also be 31 filed with the commissioner of labor and workforce development. At the request of the
01 commissioner, the Department of Labor and Workforce Development shall audit the 02 information reported in (d)(1) and (2) of this section and notify the commissioner of 03 the results of the audit. 04 (f) A person claiming a rebate under this section has the burden of proving 05 eligibility for the rebate, including a claim that an individual is a resident worker. 06 (g) The department shall report to the legislature the amount of rebates paid 07 under this section and statistical information relating to the percentage of labor done 08 by resident workers based on hours worked. 09 (h) In this section, 10 (1) "lease expenditure" means an expenditure allowed as a lease 11 expenditure under AS 43.55.165; 12 (2) "resident worker" has the meaning given in AS 43.40.092. 13 * Sec. 16. AS 43.55.023(g) is amended to read: 14 (g) The issuance of a transferable tax credit certificate under (d) of this section 15 or the purchase of a certificate under AS 43.55.028 does not limit the department's 16 ability to later audit a tax credit claim to which the certificate relates or to adjust the 17 claim if the department determines, as a result of the audit, that the applicant was not 18 entitled to the amount of the credit for which the certificate was issued. The tax 19 liability of the applicant under AS 43.55.011(e) and 43.55.017 - 43.55.180 is increased 20 by the amount of the credit that exceeds that to which the applicant was entitled, or the 21 applicant's available valid outstanding credits applicable against the tax levied by 22 AS 43.55.011(e) are reduced by that amount. If the applicant's tax liability is increased 23 under this subsection, the increase bears interest under AS 43.05.225(a)(1) 24 [AS 43.05.225] from the date the transferable tax credit certificate was issued. For 25 purposes of this subsection, an applicant that is an explorer is considered a producer 26 subject to the tax levied by AS 43.55.011(e). 27 * Sec. 17. AS 43.55.023 is amended by adding a new subsection to read: 28 (m) A producer or explorer may take a tax credit for a well-related 29 expenditure, as follows: 30 (1) notwithstanding that a well-related expenditure may be a 31 deductible lease expenditure under AS 43.55.165 for purposes of calculating the
01 production tax value of oil and gas under AS 43.55.160(a), unless a credit for that 02 expenditure is taken under (a) of this section, AS 38.05.180(i), AS 41.09.010, 03 AS 43.20.043, or AS 43.55.025, a producer or explorer that incurs a well-related 04 expenditure may also elect to apply a credit against a tax levied by AS 43.55.011(e) in 05 the amount of 30 percent of that expenditure; 06 (2) a producer or explorer may take a credit for a well-related 07 expenditure incurred in connection with geological or geophysical exploration or in 08 connection with an exploration well only if the producer or explorer 09 (A) agrees, in writing, to the applicable provisions of 10 AS 43.55.025(f)(2); and 11 (B) submits to the Department of Natural Resources all data 12 that would be required to be submitted under AS 43.55.025(f)(2) for a credit 13 under AS 43.55.025; 14 (3) In this section, "well-related expenditure" means a lease 15 expenditure related to a well and includes a lease expenditure for the purposes of well 16 sidetracking, well deepening, well recompletion, well workover, an injection well, and 17 well-related seismic work, and an intangible drilling and development cost authorized 18 under 26 U.S.C. (Internal Revenue Code), as amended, and 26 C.F.R. 1.612-4, 19 regardless of the elections made under 26 U.S.C. 263(c), as amended, up to the flange 20 connecting the well head to the well line. 21 * Sec. 18. AS 43.55.040 is amended to read: 22 Sec. 43.55.040. Powers of Department of Revenue. Except as provided in 23 AS 43.05.405 - 43.05.499, the department may 24 (1) require a person engaged in production and the agent or employee 25 of the person, and the purchaser of oil or gas, or the owner of a royalty interest in oil 26 or gas to furnish, whether by the filing of regular statements or reports or otherwise, 27 additional information that is considered by the department as necessary to compute 28 the amount of the tax or of the rebate under AS 43.55.022; notwithstanding any 29 contrary provision of law, the disclosure of additional information under this 30 paragraph to the producer obligated to pay the tax does not violate AS 40.25.100(a) or 31 AS 43.05.230(a); before disclosing information under this paragraph that is otherwise
01 required to be held confidential under AS 40.25.100(a) or AS 43.05.230(a), the 02 department shall 03 (A) provide the person that furnished the information a 04 reasonable opportunity to be heard regarding the proposed disclosure and the 05 conditions to be imposed under (B) of this paragraph; and 06 (B) impose appropriate conditions limiting 07 (i) access to the information to those legal counsel, 08 consultants, employees, officers, and agents of the producer who have a 09 need to know that information for the purpose of determining or 10 contesting the producer's tax obligation; and 11 (ii) the use of the information to use for that purpose; 12 (2) examine the books, records, and files of the person; 13 (3) conduct hearings and compel the attendance of witnesses and the 14 production of books, records, and papers of any person; 15 (4) make an investigation or hold an inquiry that is considered 16 necessary to a disclosure of the facts as to 17 (A) the amount of production from any oil or gas location, or of 18 a company or other producer of oil or gas; and 19 (B) the rendition of the oil and gas for taxing purposes; 20 (5) require a producer, an explorer, or an operator of a lease or 21 property to file reports and copies of records that the department considers necessary 22 to forecast state revenue under this chapter; in the case of reports and copies of records 23 relating to proposed, expected, or approved unit expenditures for a unit for which one 24 or more working interest owners other than the operator have authority to approve unit 25 expenditures, the required reports and copies of records are limited to those reports or 26 copies of records that constitute or disclose communications between the operator and 27 the working interest owners relating to unit budget matters; 28 (6) require a producer that has an average total production in the state 29 of more than 100,000 barrels a day for a calendar year to report the gross value at the 30 point of production of the producer's taxable oil and gas in the state for a calendar year 31 and the total amount of lease expenditures in the state for that calendar year; and
01 (7) assess against a person required under this section to file a report, 02 statement, or other document a penalty, as determined by the department under 03 standards adopted in regulation by the department, of not more than $1,000 for each 04 day the person fails to file the report, statement, or other document after notice by the 05 department; the penalty is in addition to any penalties under AS 43.05.220 and 06 43.05.290 and is assessed, collected, and paid in the same manner as a tax deficiency 07 under this title; the penalty shall bear interest at the rate specified under 08 AS 43.05.225(a)(1) [AS 43.05.225(1)]. 09 * Sec. 19. AS 43.55.060 is amended to read: 10 Sec. 43.55.060. Delinquency. When the tax provided for in this chapter 11 becomes delinquent, it bears interest as provided in AS 43.05.225(a)(1) 12 [AS 43.05.225(1)]. If any person fails to make a report required by this chapter, within 13 the time prescribed by law for the report, the department shall examine the books, 14 records and files of the person to determine the amount and value of the production to 15 compute the tax, and the department shall add to the tax the cost of the examination, 16 together with any penalties accrued. 17 * Sec. 20. AS 43.55.075(a) is amended to read: 18 (a) Except as provided in AS 43.05.260(c), for a tax period ending before 19 January 1, 2010, the amount of a tax imposed by this chapter must be assessed within 20 six years after the return was filed. 21 * Sec. 21. AS 43.77.020(d) is amended to read: 22 (d) A person subject to the tax under this chapter shall make quarterly 23 payments of the tax estimated to be due for the year, as required under regulations 24 adopted by the department. A taxpayer will be subject to an estimated tax penalty, 25 determined by applying the interest rate specified in AS 43.05.225(a)(1) 26 [AS 43.05.225] to the underpayment for each quarter, unless the taxpayer makes 27 estimated tax payments in equal installments that total either 28 (1) at least 90 percent of the taxpayer's tax liability under this chapter 29 for the tax year; or 30 (2) at least 100 percent of the taxpayer's tax liability under this chapter 31 for the prior tax year.
01 * Sec. 22. AS 43.90.430 is amended to read: 02 Sec. 43.90.430. Interest. When a payment due to the state under this chapter 03 becomes delinquent, the payment bears interest at the rate applicable to a delinquent 04 tax under AS 43.05.225(a)(1) [AS 43.05.225]. 05 * Sec. 23. AS 44.31.020 is amended to read: 06 Sec. 44.31.020. Duties of department. The Department of Labor and 07 Workforce Development shall 08 (1) enforce the laws and adopt regulations under them concerning 09 employer-employee relationships, including the safety, hours of work, wages, and 10 conditions of workers, including children; 11 (2) accumulate, analyze, and report labor statistics; 12 (3) operate systems of workers' compensation and unemployment 13 insurance; 14 (4) gather data reflecting the cost of living in the various election 15 districts of the state upon request of the director of personnel under AS 39.27.030; in 16 this paragraph, "election district" has the meaning given in AS 39.27.020(b); 17 (5) operate the federally funded employment and training programs 18 under 29 U.S.C. 2801 - 2945 (Workforce Investment Act of 1998); 19 (6) administer the state's program of adult basic education and adopt 20 regulations to administer the program; [AND] 21 (7) administer the programs of the Alaska Vocational Technical Center 22 and adopt regulations to administer the programs, including regulations that set rates 23 for student tuition and room and board and fees for the programs and services 24 provided by the department regarding the Alaska Vocational Technical Center; and 25 (8) at the request of the commissioner of revenue, audit 26 information described in AS 43.55.022(d)(1) and (2) that is submitted by a person 27 applying for a rebate under AS 43.55.022. 28 * Sec. 24. Sections 11 and 15 of this Act take effect on the first day of the month 29 immediately following the effective date of secs. 1 - 10, 12 - 14, and 16 - 25 of this Act. 30 * Sec. 25. Except as provided in sec. 24 of this Act, this Act takes effect immediately under 31 AS 01.10.070(c).